Microsoft earnings provide some relief

The software giant posts a 39 percent rise in revenues, to analysts' relief.

CNET News staff
2 min read
Analysts today breathed a sigh of relief after Microsoft reported strong earnings during a generally dismal quarter for high-tech companies.

Driven by brisk sales of Windows 95 and Office 95, the company reported $2.26 billion for the quarter ending June 30, a 39 percent increase in revenues over the corresponding quarter last year. Revenues for the fiscal year totaled $8.67 billion, a 46 percent increase over the previous year's $5.94 billion. Net income for Microsoft looked even better, with Microsoft earning $559 million, or 87 cents per share--a 50 percent improvement over the corresponding quarter last year.

Microsoft's earnings managed to beat expectations, including a survey of analysts by IBES International, which had reportedly put the company's net income for the quarter at 84 cents a share.

Analysts were encouraged by Microsoft's solid showing and said it may help other technology companies whose stocks have been on the skids in recent weeks.

"They exceeded expectations," said Terri Murphy, managing director at Smith Barney. "This should lift the whole group."

Motorola, Digital Equipment, and Hewlett-Packard have all posted lower-than-expected results this quarter, and this Thursday IBM is expected to follow suit. But Intel impressed analysts with strong earnings last week, leading many to believe that its ally Microsoft would do likewise.

"Given the financial performance we've seen from a number of vendors, it was surprisingly strong," said Rob Enderle, senior industry analyst at the Giga Information Group. "The focused companies are doing substantially better than the companies that are more broad-based. The HPs, DECs, and IBMs are all having a heck of a time."

Still, expectations that Microsoft would do well didn't prevent its stock from sliding today. Although its earnings were announced after the close of the market, the company's stock slid 1-7/32 points to close at 119-3/4.

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